Wednesday, June 9, 2010

Next time you're in a poor community count the Money Trees!

Posted by Mona

Here is an article from the Indian Giver newsletter, it made me think of how many times I've been on the "poor side" of town and seen the street corners littered with Money Tress or Check into Cash types of establishments. One day when you have nothing better to do drive in a "poor side of town" and then drive near a "gated" community and do a comparative summary of the types of business you're likely to find operating in each neighborhood. While this article gave a perfect argument about predatory lending, what about strip clubs, adult stores, tobacco stores, casino's, etc...and poor sides of town? You are not likely to find the same types of business in a upscale neighborhood. What are the root causes? What needs to be done in-order to have more equitable neighborhoods? Happy reading.

June 2010

"This month we focus on: Predatory Lending. With the recent economic crisis, predatory lending continues to be a hot topic and Indian Country is stepping forward to protect Native people from financial exploitation. Learn about a Native American leader who spoke out when it was not so popular, and how you can help First Nations strengthen and protect Native communities.

Exhibiting Leadership for Indian Country, When Everybody is Watching When it comes to regulating the payday lending industry in and around Indian reservations, some Indian leaders would just as soon let the fox guard the henhouse. But it is in moments like this that we get the rare chance to see great Indian leadership in action. On June 8, 2008, Senator Byron Dorgan (ND) held Senate Hearing 110-484, Predatory Lending in Indian Country, before the Committee on Indian Affairs.

At this hearing, when representatives from Indian Country were seemingly aligning themselves with the Community Financial Services Association (CFSA - a membership association that represents, by their own estimation, approximately 60% of the 25,000 payday lending storefronts in the United States), Indian Country was once again treated to Chairman W. Ron Allen’s undying devotion to Indian peoples.

During the hearing, one Indian leader testified that, “I would be willing to work with the people of CFSA and in the banking industry as a whole, to expand financial education to all of our people. Education ultimately is the answer to most problems, not regulation.”

And while it’s hard not to agree with the benefits of education, it is difficult to stomach someone extolling the virtues of working with CFSA as a way of protecting Indian Country from predatory lending.

Enter W. Ron Allen, Chairman of the Jamestown S’Klallam Tribe and then Secretary, and present treasurer of the National Congress of American Indians, who made it clear the issues facing Indian Country:

“Because of the persistent lack of economic opportunity, sustainable financial services and tribal jurisdictional issues, there have only been a handful of banks that serve tribal communities. As a result, tribal citizens continue to lack basic financial services or choices that most Americans … take for granted. Tribal members have limited access when financing a home, starting a business or purchasing necessary property like cars needed to make a living.

The vacuum created by the lack of responsive and regulated financial institutions offering competitive consumer financial products has been quickly filled by predatory lending firms that have proliferated after usury laws were lifted a few years ago—especially in transient and unbanked communities, like military bases and reservations. The effect of having a tribal population unbanked and subject to predatory financial firms is that it strips an already vulnerable population of the opportunity to advance by preventing them from building assets, equity and wealth. And the result of individuals having limited and sometimes no viable options for responsive bank products means tribal citizens pay higher fees and much higher interest rates, leaving tribal citizens that live check-to-check more vulnerable when one of life's predictable emergencies arises such as a death in the family or a medical bill, forcing a cycle of debt.”

For Mr. Allen, it all came back to the core Indian Country asset – sovereignty. Ron’s testimony concluded with:

“The last item is jurisdiction. This is an area where, as we move forward, we want the financial institutions to come onto our reservations or around our communities. But we need some sort of controls over that industry. So as we explore these issues, it really becomes an issue of, should there be some additional legislation that provides clarity about the tribes' authority over these institutions, whether they are banking or non-banking lenders on the reservation.

Congress should consider giving tribes the same capability to protect their citizens with the ability to opt into models such as the military fix. Congress should also consider promoting responsive community banking in tribal communities by giving tribes the authority to approve banks that do business on their reservations in a manner similar to state governments.”

Emerging leaders in Indian Country would do well to emulate Mr. Allen’s continued commitment to Indian peoples and Indian Country’s fight to retain its sovereignty."